REG - Oxford BioDynamics - Interim Results
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RNS Number : 8621O Oxford BioDynamics PLC 30 June 2025
30 June
2025
Oxford BioDynamics Plc
("OBD" or the "Company" and, together with its subsidiaries, the "Group")
INTERIM RESULTS FOR THE SIX-MONTH PERIOD ENDED 31 MARCH 2025
Focus and realism
Oxford BioDynamics Plc (AIM: OBD), a precision clinical diagnostics company
bringing specific and sensitive tests to the practice of medicine based on its
EpiSwitch® 3D genomics platform, today announces its interim results for the
six-month period to 31 March 2025.
CORPORATE AND OPERATIONAL HIGHLIGHTS
• Appointment of Iain Ross as Executive Chairman (January 2025)
• Growth in sales of EpiSwitch PSE test through the period
• Agreement with Bupa UK to cover EpiSwitch PSE (March 2025)
• Appointment of Peter Presland as Non-Executive Director and Chair of Audit
Committee (March 2025)
FINANCIAL HIGHLIGHTS
• Revenue of £587k (H1 2024: £327k)
• Operating loss £5.88m (H1 2024: £5.99m)
• Cash and term deposits at 31 March 2025 of £4.26m (31 March 2024: £1.2m)
• Equity placing, subscription and retail offer, raising gross proceeds of
£7.35m (January 2025)
POST-PERIOD END HIGHLIGHTS
• Oxford, UK lab accredited under ISO15189 (May 2025)
• Record month of PSE sales in June 2025
Commenting on the results, Iain Ross, Executive Chairman of Oxford
BioDynamics, said:
"The bedrock for the commercial success of this business and the source of
vital non-dilutive funding will be through "doing deals" and I am confident it
is not a case of "if" but "when". However, I can confirm that although we are
in several commercial discussions with third parties, carrying out in-house
evaluations and remain optimistic that product, technology and data access
deals can be signed, nothing substantive has yet come to fruition and there is
no guarantee they will within our current cash runway. Accordingly, we will
now take steps, in liaison with our shareholders and advisers to 'right-size'
and preserve the integrity of the business."
The information contained within this announcement is deemed to constitute
inside information as stipulated under the Market Abuse Regulations (EU) No.
596/2014 which is part of domestic UK law pursuant to the Market Abuse
(Amendment) (EU Exit) Regulations (SI 2019/310) ("UK MAR"). Upon the
publication of this announcement, this inside information (as defined
in UK MAR) is now considered to be in the public domain.
For further information please contact:
Oxford BioDynamics Plc +44 (0)1865 518910
Iain Ross, Executive Chairman
Paul Stockdale, CFO
Shore Capital - Nominated Adviser and Broker
Advisory: Stephane Auton / Lucy Bowden +44 (0)20 7408 4090
Broking: Fiona Conroy
OAK Securities - Joint Broker
Jerry Keen / Henry Clarke / Damion Carruel +44 (0)20 3973 3678
WG Partners - Joint Broker
David Wilson / Nigel Barnes / Claes Spång / Erland Sternby / Robin Stürken / +44 (0)20 3705 9330
Jacob Masters
Camarco - Financial PR
Marc Cohen / Tilly Butcher / Fergus Young +44 (0)20 3757 4980
OBDFinancial@camarco.co.uk
Notes for Editors
About Oxford BioDynamics Plc
Oxford BioDynamics Plc (AIM: OBD) is an international biotechnology company,
advancing personalized healthcare by developing and commercializing precision
clinical diagnostic tests for life-changing diseases.
Currently OBD has two commercially available products: the EpiSwitch® PSE
(https://url.avanan.click/v2/___http:/www.94percent.com/___.YXAxZTpzaG9yZWNhcDphOm86ZGFiYjhlY2EwMWM5YWYzYjdhZjZhZmExZGM4OTMyMDg6NjphZTRmOjE1ZmE3ZTA1NmFmMzlmYjIzZmFhOGU1NTc5MWI0OTdiODZmMjVmOTFlOWQ2YjBiZTM3YmNmMTMxMGYxOTcxMjI6cDpU)
(EpiSwitch Prostate Screening test) and EpiSwitch® CiRT
(https://url.avanan.click/v2/___https:/www.mycirt.com/___.YXAxZTpzaG9yZWNhcDphOm86ZGFiYjhlY2EwMWM5YWYzYjdhZjZhZmExZGM4OTMyMDg6NjpjZGI4OjQ3ZWJmMjU3YzNhNjYzYzNiYWVjZGNlMTJjZDM5ZGZkYzBlNmQyNTc0OTdlZWU4ZGI4ODFlYzU1OWZmN2JmMWE6cDpU)
(Checkpoint Inhibitor Response Test) blood tests. PSE boosts the predictive
accuracy of a PSA test from 55% to 94% when testing the presence or absence of
prostate cancer. CiRT is a highly accurate (85%) predictive response test to
immuno-oncology checkpoint inhibitor treatments.
The tests are based on OBD's proprietary 3D genomic biomarker platform,
EpiSwitch® which enables screening, evaluation, validation and monitoring of
biomarkers to diagnose patients or determine how individuals might respond to
a disease or treatment.
OBD's clinical smart tests have the potential to be used across a broader
range of indications, and new tests are being developed in the areas of
oncology, neurology, inflammation, hepatology and animal health.
The Group's headquarters and UK laboratories are in Oxford, UK. Its US
operations and clinical laboratory are in Maryland, USA, along with a
reference laboratory in Penang, Malaysia.
OBD is listed on the London Stock Exchange's AIM (LSE: OBD). For more
information, please visit the Company's website, www.oxfordbiodynamics.com
(http://www.oxfordbiodynamics.com/) , X (@OxBioDynamics) or LinkedIn
(https://url.avanan.click/v2/___https:/www.linkedin.com/company/oxford-biodynamics___.YXAxZTpzaG9yZWNhcDphOm86ZGFiYjhlY2EwMWM5YWYzYjdhZjZhZmExZGM4OTMyMDg6NjozM2I4OmVmNzdkN2M0NmYxZDg3ODc0MWQ1NDEyMGQ4MjAxOWVmMTg4ZTMzNWY4MTA5NGE3NTE5ZDdlNWIwNjI5MTRhMTM6cDpU)
.
A copy of this announcement is available on the Company's website at
www.oxfordbiodynamics.com (http://www.oxfordbiodynamics.com) .
This announcement includes "forward-looking statements" which include all
statements other than statements of historical facts, including, without
limitation, those regarding the Group's financial position, business strategy,
plans and objectives of management for future operations, and any statements
preceded by, followed by or that include forward-looking terminology such as
the words "targets", "believes", "estimates", "expects", "aims", "intends",
"will", "can", "may", "anticipates", "would", "should", "could" or similar
expressions or the negative thereof. Such forward-looking statements involve
known and unknown risks, uncertainties and other important factors beyond the
Group's control that could cause the actual results, performance or
achievements of the Group to be materially different from future results,
performance or achievements expressed or implied by such forward-looking
statements. Such forward-looking statements are based on numerous assumptions
regarding the Group's present and future business strategies and the
environment in which the Group will operate in the future. These
forward-looking statements speak only as at the date of this announcement. The
Group expressly disclaims any obligation or undertaking to disseminate any
updates or revisions to any forward-looking statements contained in this
announcement to reflect any change in the Group's expectations with regard
thereto or any change in events, conditions or circumstances on which any such
statements are based. As a result of these factors, readers are cautioned not
to rely on any forward-looking statement.
EXECUTIVE CHAIRMAN'S REVIEW
BACKGROUND
In December 2024, I was asked to join the Company and lead an emergency
fundraising.
On 15 January 2025, with the support of key shareholders, the Company
successfully raised gross proceeds of £7 million pursuant to a placing and
a further £350,000 pursuant to a WRAP Retail Offer (the "Fundraising"). At
the time, we stated that we would use the net proceeds of the Fundraising as
working capital to support the commercial development of the Company, by
continuing to grow the sales of the marketed PSE & CiRT tests; immediately
seeking third party validation through actively establishing partnerships,
collaborations and licensing deals within the diagnostic/pharmaceutical
sector; and as necessary restructuring the business to maintain a realistic
cost base for a Company of OBD's size. During the fundraising roadshow I made
it clear that within a short period of time, I wanted to provide the OBD
shareholders optionality for their business going forward.
I was appointed to the Board at the end of January and on 28 February 2025 we
announced the results for the year ended 30 September 2024, in which I stated
that my ultimate objective was to structure and operate the business to
optimise shareholder value. In my view, it was essential to make the business
more commercially focused, market-orientated and driven by a greater sense of
urgency. However, following my initial review, it quickly became clear that
achieving this would require us to retain a robust infrastructure and critical
mass. This was necessary not only to preserve the integrity of the business
but also to increase revenues from our marketed product tests and to rapidly
secure non-dilutive funding from newly-formed partnerships and collaborations.
PROGRESS
· Since February 2025 we have identified, initiated and successfully
engaged with several third parties either directly or through the Company's
advisers and where appropriate we have already commenced in-house evaluations
in support of potential collaborations. At the time of writing, several
commercial discussions are ongoing.
· PSE test orders and sales have continued to grow month on month - at
the time of writing, with some orders still to be received, June 2025 is
already our best month for PSE sales - and we anticipate an acceleration in
sales growth with the imminent inclusion of the PSE test in two US EMR
(electronic medical record) systems, a salesforce re-alignment, and an
increasing sales penetration and market acceptance in specific US States.
· Whilst overall sales of CiRT tests have grown in the period under
review, it remains clear that wider adoption of CiRT will be dependent on the
test's inclusion in clinical guidelines and as a result the Company expects to
apply for guideline inclusion, using data from the PROWES prospective clinical
study, later this year.
· In February 2025 we announced results of a multi-institutional
clinical study published in the peer reviewed journal 'Cancers' confirming the
efficacy of OBD's EpiSwitch(®) blood-based Colorectal No-Stool Test (NST).
High accuracy of detection was reported at 81% for early cancer stages and 82%
for non-cancerous polyps. This data has been used to stimulate interest with
third parties with a view to executing co-development and/or out-licensing
deals on the NST test. Active discussions are ongoing.
· In addition to private healthcare providers and insurers, during the
period we have engaged with NHS groups, relevant charities and political
initiatives to raise the profile and awareness of the Company and our tests,
especially PSE. Former UK Prime Minister, Rt Hon Rishi Sunak was appointed as
an ambassador for Prostate Cancer Research supporting their campaign to
introduce a UK national screening programme for men at high risk of the
disease. Subsequently, Mr Sunak visited the Company and in the accompanying
press coverage emphasised that our EpiSwitch PSE test can detect prostate
cancer with 94% accuracy, which the charity called a "significant improvement"
on the most used prostate-specific antigen test.
· In March 2025 we announced that Bupa UK insurance will cover PSE
for Bupa UK insurance customers with a raised PSA level and no additional
high-risk factors or symptoms. We have ongoing discussions with other health
care insurance providers.
· Post-period we announced that OBD's Oxford clinical laboratory has
been accredited by UKAS as a clinical lab under ISO 15189 standard to run
EpiSwitch® clinical tests. All orders for both CiRT and PSE in the UK are
processed within the UK lab.
· Also post-period, three peer-reviewed OBD papers have been accepted
for imminent publication in a high impact journal. We are pleased to note that
the first paper(1), which presents compelling real-world evidence from a US
urology clinic showcasing EpiSwitch PSE's transformative impact eliminating
unnecessary prostate biopsies in four out of five cases-was covered in the The
Daily Mail on 28 June 2025. The study indicates this approach could
potentially avoid up to 593,000 biopsies annually in the US alone and generate
economic benefits nearing $2B per year. The second, co-authored with
Pfizer(2), highlights successful use of the EpiSwitch platform in developing
and validating tailored blood-based biomarkers for the pharmaceutic company in
their large immuno-oncology trial. The third, a perspective piece co-authored
with the University of Oxford(3) and with the backing of the journal's
editors, emphasizes the fundamental paradigm-shift enabled by 3D genomic
biomarkers-the technology underpinning OBD's proprietary EpiSwitch platform
and the company's gatekeeper intellectual property-for reliable disease
diagnosis, prognosis, and therapy response prediction from a liquid biopsy.
OUTLOOK
The bedrock for the success of this business and the source of vital
non-dilutive funding will be through "doing deals" and I am confident it is
not a case of "if" but "when". However, at the time of writing, I can confirm
that although we are in several commercial discussions with third parties,
carrying out in-house evaluations and remain optimistic that product,
technology and data access deals can be signed, nothing substantive has yet
come to fruition and there is no guarantee they will within our current cash
runway. I believe we have injected a sense of urgency, focus and realism into
the organisation; raised our profile; created a lot of third-party commercial
interest and initiated several commercial discussions but we must recognise
that, to date, we have failed to secure meaningful validating partnerships and
collaborations.
Having been in this business for six months now, I can safely say it is a good
business with excellent technology assets and with real and lasting sales
potential, but it is carrying a potentially crippling overhead. As a result,
based on the Directors' assessment, with the organisation and premises it has
today, the current cash is only forecast to extend until Q4 2025.
Therefore, the immediate plan is to 'right-size' the business, reduce the
fixed overhead and pivot our emphasis more towards growing the PSE test sales
in the USA, whilst maintaining our core technology competency in the UK. With
a re-alignment of costs and an influx of funds either through non-dilutive
deals and/or a timely capital injection, the Directors believe the business
can thrive and create sustainable and increasing shareholder value.
Based on the internal forecasts prepared and various options being explored
and considered by the Board, the Directors consider it appropriate to continue
to adopt the going concern basis in the preparation of these interim results.
However, there is no guarantee that our attempts to reduce costs or secure
adequate cash inflows from the Company's current operations, new
collaborations or through equity fundraising within the timescales stated
above, will be successful. These conditions indicate the existence of a
material uncertainty, which may cast significant doubt about the Company's
ability to continue as a going concern. These unaudited interim financial
statements do not include the adjustments that would result if the Company and
Group were unable to continue as a going concern.
Consequently, I look forward to working closely with our advisers and
stakeholders to secure the long-term future of the business. I would like to
sincerely thank everyone connected with the Company for their dedication over
the past six months and for their continued support as we move forward. We
remain focused on delivering progress and will keep the market updated in due
course.
Iain Ross
Executive Chairman
1. Berghausen J, Abdo J, Mathis R, Hunter E, Akoulitchev A,
Pohlman GD. EpiSwitch PSE Blood Test Reduces Unnecessary Prostate Biopsies: A
Real-World Clinical Utility Study. Cancers (2025)
https://www.mdpi.com/2072-6694/17/13/2193
(https://www.mdpi.com/2072-6694/17/13/2193)
2. Powles T, Sridhar SS, Bellmunt J, et al. Blood-epigenetic
biomarker associations with tumor immunophenotype in patients with urothelial
carcinoma from JAVELIN Bladder 100. Cancers (2025) [accepted, pending
publication]
3. Mellor J, Hunter E, Akoulitchev A. Paradigm Lost. Cancers (2025)
https://www.mdpi.com/2072-6694/17/13/2187
(https://www.mdpi.com/2072-6694/17/13/2187)
Financial review
Introduction
The six months to 31 March 2025 saw increased revenues from sales of clinical
tests, but the Group remained lossmaking and cashflow negative. Costs included
significant professional fees associated with the review of strategic options
and associated activity in the final quarter of calendar 2024. Notwithstanding
this, overall operating expenses were reduced relative to the equivalent
period in the prior year. The shareholder loan facility provided by Vulpes
Testudo Fund (December 2024) and the subsequent successful fundraising
announced in January 2025 provided necessary additional short-term capital.
Led by Iain Ross, in the second half of the period, the business has operated
with a focus on seeking partnership and collaboration. The Executive
Chairman's statement above outlines progress since January, the current
position and the Board's plans for the immediate term.
Financial Performance
Revenue was increased compared to each of the preceding six-month periods, at
£587k (H1 2024: £327k, H2 2024: £309k). All revenue for the period arose
from sales of proprietary clinical tests. Test revenue was increased by over
300% on H1 2024, this increase being offset by a reduction in revenue arising
from projects for pharma customers.
PSE orders in the six-month period were just under 800, more than the total
for the whole of FY24. Gradual growth in the daily run rate of test orders has
continued post-period end, with over 1,000 tests having been ordered in the
current financial year to date by mid-May.
CiRT orders in the period were 445, reflecting an increase on each of the
preceding six-month periods (H1 2024: 298, H2 2024: 373). Much of this volume
came from sites participating in the PROWES prospective clinical study. Data
from the study are now being reviewed pending submission of an application for
guideline inclusion later this year, which has allowed further enrolment to
the study to be paused. This will lead to lower study costs in the second half
of the year.
About 20% of PSE test sales are on a 'cash-pay' basis, either to patients
paying for the test themselves, or to insurers or institutions with whom the
Group has direct agreements in place (such as Bupa UK, announced during the
period). Other PSE tests and almost all CiRT tests were for patients covered
under US health insurance policies: the unique CPT Codes for the tests allow
the Group to claim reimbursement from insurers. Amounts actually reimbursed
vary significantly between insurers and policies.
Approximately £60k of variable consideration from US insurance sales has been
recognised in the period, ahead of receipt of cash for the tests concerned
post-period, based on the Group's assessment of the consistent rates of US
insurance reimbursement for both the CiRT and PSE tests. More information on
this estimate is provided in note 2 to the interim consolidated financial
statements.
As noted above, the Group's operating costs for the period were slightly
decreased compared to the equivalent period in the prior year. Research and
development expenses (H1 2025: £0.41m, H1 2024: £0.33m, H2 2024: £0.48m)
again reflect lab consumables and equipment maintenance costs. Expenditure
varies with the type and amount of R&D work undertaken in the Group's
laboratories.
Staff costs were lower than the equivalent period in the prior year (H1 2025:
£2.59m, H1 2024: £2.98m, H2 2024: £2.52m). The overall decrease vs the
equivalent period in the prior year resulted from there being no accrual for
bonuses for the six months to 31 March 2025 (H1 2024: accrual of £0.3m).
Average staff numbers were reduced relative to the prior year, reflecting
redundancies and unreplaced leavers during the period in the US and UK. These
cost reductions were partially offset by redundancy/notice payments and the
appointment of Iain Ross to the new role of Executive Chairman.
General and other administrative costs were at a similar level to the two
preceding six-month periods (H1 2025: £2.42m H1 2024: £2.20m, H2 2024:
£2.28m), with this net movement arising from several increases and decreases.
Marketing costs, staff expenses and general expenses were reduced, offset by
increases in professional, legal and advisory costs (these increases came
mainly from 'one-off' costs) and property costs.
Non-cash share option charges (H1 2025: £0.16m, H1 2024: £0.30m, H2 2024:
£0.21m) were reduced compared to prior periods because charges previously
recognised in respect of unvested options held by leavers were reversed in the
period. The fair value of options issued to employees is spread over vesting
periods of typically between one and three years from the date of the grant
(except for 96m options issued to Iain Ross during the period which vest in
equal monthly instalments to January 2027).
Depreciation and amortisation charges were reduced at £0.63m (H1 2024:
£0.73m, H2 2024: £0.74m). Some lab equipment still in use became fully
depreciated during the period and the Group did not renew its office lease in
Gaithersburg, MD when it expired (leading to lower right-of-use asset
depreciation).
Other operating income arose from the Company's involvement in the EU-funded
HIPPOCRATES (Health initiatives in psoriasis and psoriatic arthritis
consortium European states) consortium, and the disposal of a small amount of
office and laboratory equipment.
The fair value gain on financial liabilities designated as FVTPL (£0.01m, H1
2024: £1.20m, H2 2024: £0.15m) relates to the warrants issued by the Company
in 2021, which are classified as liabilities. Gains equate to the reduction in
the fair value of the warrant liability in each period, driven by the
reduction in the Company's share price.
Financial position
Cash and fixed term deposits at 31 March 2025 were £4.26m (30 September 2024:
£2.83m), following the successful fundraising in February 2025 offset by
operating cash outflows.
Non-current assets were £6.65m (30 September 2024: £7.06m) reflecting modest
capital expenditure, and depreciation and amortisation of the existing asset
base in the period.
Current assets excluding cash and fixed term deposits were similar to the
year-end at £2.40m (30 September 2024: £2.22m). The balance at both dates
included the UK R&D Tax Credit in respect of the previous financial year
(received after the period) and a receivable balance in respect of foreign tax
paid on account during the prior period. Inventory and prepayment balances
were broadly similar at each reporting date.
Current liabilities were similar to the year end, at £2.57m (30 September
2024: £2.56m).
Non-current liabilities were £4.80m (30 September 2024: £5.19m), comprising
lease liabilities and dilapidations provisions in respect of the Group's
facilities.
Cash flow
Net cash used in operating activities in the period was higher than in the
equivalent period in the prior year, at £4.87m (H1 2024: £3.47m), but
reduced relative to the preceding period (H2 2024: £6.7m). The movement
relative to H1 2024 was driven by a lower operating loss, which was offset by
a timing difference in the receipt of UK R&D Tax Credits and the effect of
adjustments for non-cash items and working capital movements, especially
current liabilities.
Net cash flows from investing activities were £0.85m arising from the
maturity of £1m of term deposits during the period and interest income,
offset by expenditure on intangible assets.
Financing cash inflow for the period was £6.45m (H1 2024: net outflow of
£0.33m), reflecting the cash impact of the £1m shareholder loan facility
provided by Vulpes Testudo Fund announced in December 2024 (of which £0.9m
was drawn down and repaid in the period), the Fundraising announced in January
2025 and rent payments for the Group's leased properties. The increase in rent
payments in H1 2024 and H1 2025 was primarily because of the timing of
payments made on or around the reporting dates concerned.
Summary
The six-month period ended 31 March 2025 was significant for the Group.
Although revenue from test sales increased, cash became severely depleted in
the run-up to the fundraising announced in January 2025. The funds raised
provided replenished but limited cash resources, allowing the Group to focus
on pursuing opportunities for partnerships, collaborations and outlicences.
Doing so whilst continuing to support the Group's on-market tests has meant
that, to date, the cost base has not been materially reduced.
The Board is currently keeping several potential commercial opportunities
under review. However, none of these is guaranteed to generate additional cash
resources. As noted in the Executive Chairman's review, the Group will require
additional funds in Q4 of 2025 and there is no guarantee that attempts to
reduce costs and secure adequate cash inflows from the Company's current
operations, new collaborations or through equity fundraising within the
necessary timescale will be successful.
Accordingly, as explained in more detail in Note 2 to the interim financial
statements, the Board has concluded (as it did in the annual reports for the
years ended 30 September 2023 and 30 September 2024) that there continues to
be a material uncertainty which may cast significant doubt on the Group's
ability to continue as a going concern.
Paul Stockdale
Chief Financial Officer
Consolidated income statement
Six-month period Year ended 30 September
ended 31 March
2025 2024 2024
(unaudited) (unaudited) (audited)
Note £000 £000 £000
Continuing operations
Revenue 3 587 327 636
Cost of sales (281) (193) (347)
Gross profit 306 134 289
Research & development costs (excluding staff costs) 4 (410) (325) (809)
Staff costs 4,5 (2,591) (2,978) (5,495)
General & other admin costs 4 (2,418) (2,200) (4,479)
Share option charges 12 (161) (300) (514)
Depreciation and amortisation 7-9 (631) (726) (1,466)
Impairment loss on intangible assets - - (896)
Total admin expenses (6,211) (6,529) (13,659)
Other operating income 29 402 476
Operating loss (5,876) (5,993) (12,894)
Fair value (loss)/gain on financial liabilities designated as FVTPL 11 1,202 1,349
Finance income 190 33 112
Finance costs (217) (117) (523)
Loss before tax (5,892) (4,875) (11,956)
Income tax 141 150 389
Loss for the period from continuing operations (5,751) (4,725) (11,567)
Loss attributable to:
Owners of the Company (5,751) (4,725) (11,567)
Non-controlling interest - - -
(5,751) (4,725) (11,567)
Earnings per share
From continuing operations
Basic and diluted (pence per share) 6 (0.7) (2.3) (4.5)
Consolidated statement of comprehensive income
Six-month period Year ended 30 September
ended 31 March
2025 2024 2024
(unaudited) (unaudited) (audited)
Note £000 £000 £000
Loss for the period (5,751) (4,725) (11,567)
Exchange differences on translation of foreign operations that may be (140) (8) 255
reclassified to the income statement
Total comprehensive income for the period (5,891) (4,733) (11,312)
Total comprehensive income attributable to:
Owners of the Company (5,891) (4,733) (11,312)
Non-controlling interest - -
(5,891) (4,733) (11,312)
Consolidated statement of financial position
31 March 31 March 30 September
2025 2024 2024
(unaudited) (unaudited) (audited)
£000 £000 £000
Assets Note
Non-current assets
Intangible fixed assets 7 1,440 2,060 1,351
Property, plant and equipment 8 1,574 2,022 1,762
Right-of-use assets 9 3,634 4,363 3,949
Deferred tax asset - 49 -
Total non-current assets 6,648 8,494 7,062
Current assets
Inventories 289 229 321
Trade and other receivables 1,442 976 1,385
Current tax receivables 662 180 513
Fixed term deposits - - 1,000
Cash and cash equivalents 4,261 1,187 1,827
Total current assets 6,654 2,572 5,046
Total assets 13,302 11,066 12,108
Equity and liabilities
Capital and reserves
Share capital 11 4,831 2,023 3,119
Share premium 45,394 32,144 40,149
Translation reserve 52 (71) 192
Share option reserve 2,452 2,995 3,017
Warrant reserve 343 - -
Retained earnings (47,144) (35,469) (42,119)
Total equity 5,928 1,622 4,358
Current liabilities
Trade and other payables 1,717 2,665 1,506
Warrant liability 13 1 158 11
Lease liabilities 10 852 840 1,046
Current tax liabilities - 143 -
Total current liabilities 2,570 3,806 2,563
Non-current liabilities
Lease liabilities 10 4,288 5,165 4,694
Provisions 509 463 486
Deferred tax 7 10 7
Total non-current liabilities 4,804 5,638 5,187
Total liabilities 7,374 9,444 7,750
Total equity and liabilities 13,302 11,066 12,108
Consolidated statement of changes in equity
Share capital Share premium Translation reserve Share option reserve Warrant reserve Retained earnings Attributable to share-
holders
£000 £000 £000 £000 £000 £000 £000
At 1 October 2023 2,023 32,144 (63) 2,776 - (30,825) 6,055
Loss for the period - - - - - (4,725) (4,725)
Other comprehensive income for the period - - (8) - - (8)
-
Total comprehensive income for the period - - (8) - (4,725) (4,733)
-
Share option credit - - - 300 - - 300
Lapse of vested share options - - - (81) - 81 -
At 31 March 2024 2,023 32,144 (71) 2,995 - (35,469) 1,622
At 1 April 2024 2,023 32,144 (71) 2,995 - (35,469) 1,622
Loss for the period - - - - - (6,842) (6,842)
Other comprehensive income for the period - - 263 - - - 263
Total comprehensive income for the period - - 263 - (6,842) (6,579)
-
Subscription for new shares 1,096 8,764 - - - - 9,860
Transaction costs for new shares - (759) - - - - (759)
Share option credit - - - 214 - - 214
Lapse of vested share options - - - (192) - 192 -
At 30 September 2024 3,119 40,149 192 3,017 - (42,119) 4,358
At 1 October 2024 3,119 40,149 192 3,017 - (42,119) 4,358
Loss for the period - - - - - (5,751) (5,751)
Other comprehensive income for the period - - (140) - - - (140)
Total comprehensive income for the period - - (140) - - (5,751) (5,891)
Subscription for new shares 1,712 6,569 - - 343 - 8,624
Transaction costs for new shares - (1,324) - - - - (1,324)
Share option credit - - - 161 - - 161
Lapse of vested share options - - - (726) - 726 -
At 31 March 2025 4,831 45,394 52 2,452 343 (47,144) 5,928
Consolidated statement of cash flows
Six-month period ended 31 March Year ended 30 September
2025 2024 2024
(unaudited) (unaudited) (audited)
Note £000 £000 £000
Loss before tax for the financial period (5,892) (4,875) (11,956)
Adjustments to reconcile loss for the period to net cash flows:
Net interest 194 84 113
Loss on disposal of property, plant and equipment - - -
Depreciation of property, plant and equipment 8 197 273 550
Depreciation of right-of-use assets 9 342 378 745
Amortisation of intangible fixed assets 7 91 77 171
Impairment loss on intangible fixed assets - - 896
Net foreign exchange movements (153) 7 293
Movement in provisions 23 23 46
Share based payments charge 12 161 300 514
Fair value gain on financial liabilities designated as FVTPL 13 (11) (1,202) (1,349)
Working capital adjustments:
Increase in trade and other receivables (57) (19) (427)
Decrease / (increase) in inventories 32 45 (47)
Increase / (decrease) in trade and other payables 212 756 (167)
Operating cash flows before interest and tax paid (4,861) (4,153) (10,618)
R&D tax credits received - 684 684
Tax paid (7) (1) (238)
Net cash used in operating activities (4,868) (3,470) (10,172)
Investing activities
Interest received 22 33 110
Purchases of property, plant and equipment - (66) (80)
Purchases of intangible fixed assets (177) (226) (515)
Decrease / (increase) in term deposits 1,000 - (1,000)
Net cash (used in) / generated by investing activities 845 (259) (1,485)
Financing activities
Interest paid (101) (117) (225)
Repayment of lease liabilities (638) (209) (622)
Repayments of loans and borrowings (900) - -
Proceeds from loans and borrowings 900 - -
Issue of equity shares and warrants 7,440 - 9,860
Transaction costs relating to equity issues (251) - (759)
Net cash generated by financing activities 6,450 (326) 8,254
Net increase / (decrease) in cash and cash equivalents 2,427 (4,055) (3,403)
Foreign exchange movement on cash and cash equivalents 7 (8) (20)
Cash and cash equivalents at beginning of year 1,827 5,250 5,250
Cash and cash equivalents at end of period 4,261 1,187 1,827
Notes
1. General information
The interim financial information was authorised for issue by the Board of
Directors on 27 June 2025. For the year ended 30 September 2024, the Group
prepared consolidated financial statements under UK adopted international
accounting standards. These condensed consolidated interim financial
statements (the interim consolidated financial statements) have been prepared
under the historical cost convention. They are based on the recognition and
measurement principles of UK adopted international accounting standards which
are effective from 1 October 2024. This interim information does not comply
with IAS 34 Interim Financial Reporting, as is permissible under the rules of
AIM.
2. Basis of accounting
Basis of preparation
These interim consolidated financial statements have been prepared under the
historical cost convention, except for, where applicable, the revaluation of
financial liabilities at fair value through profit or loss, and in accordance
with the recognition and measurement principles of UK-adopted international
accounting standards.
Reporting currency
The interim consolidated financial statements are presented in pounds sterling
(GBP), which is also the Company's functional currency.
Going concern
In assessing the appropriateness of adopting the going concern assumption, the
Group has prepared a detailed forecast for the twelve-month period from the
date of this statement ("the forecast"). The forecast includes:
· estimates of likely revenue arising from EpiSwitch PSE and
EpiSwitch CiRT (based on the Group's own assessments of market opportunities);
· potential revenues from agreements to outlicence one or more
products and contracts with pharmaceutical partners;
· operating costs reflecting a reduced cost base following
'right-sizing' announced in this statement; and
· limited capital expenditure, primarily to maintain the Group's
patent estate.
The Group will require additional cash resources in Q4 of 2025, either from
non-dilutive funding or equity investment. At the time of writing, the Group
is engaged in ongoing discussions with several parties, and whilst it is
possible that funding may arise from one or more of these interactions, it is
considered most likely that these additional resources will have to come from
equity investment.
The forecast includes estimates of revenues from test sales, work for pharma
partners and agreements to outlicence one or more of the Group's products.
Revenue during the period ended 31 March 2025 was increased compared to each
of the preceding two half-year periods, but the Group remained lossmaking with
income significantly exceeded by operating costs. The Board is pursuing or
considering several actions to reduce costs, and the timing and financial
impact of some of these actions is not certain. It is also difficult to
predict the level and timing of revenues that are likely to be received from
any outlicencing agreements and work for pharma partners.
The Group has further considered a scenario in which growth in revenues from
test sales is significantly slower than in the forecast and no revenues are
received from contracts with pharma partners or agreements to outlicence
products. In this scenario, the additional cash resources required in Q4 would
necessarily come from equity investment. The Group was able to maintain its
cash reserves during the period, through a shareholder loan facility
(announced in December 2024) and the raising of £7.35m (before costs)
through a placing, subscription and WRAP retail offer (announced in January
2025). However, as at the date of publication of this report, there is no
guarantee that the Group will be able to access further cash resources from
investors and there is uncertainty regarding the amount of funding that it
will be possible to raise.
Stakeholders should be aware that there is uncertainty around the Group's
ability to generate sufficient revenues and/or to raise sufficient finance to
meet its expected costs. These conditions present a material uncertainty
which may cast significant doubt on the Group's ability to continue as a going
concern and, therefore, it may be unable to realise its assets and discharge
its liabilities in the normal course of business.
Accounting policies
The interim financial statements have been prepared in accordance with the
accounting policies set out in the Annual Report and Accounts for the year
ended 30 September 2024, which is available on the Company's website.
Accounting judgements and estimates
The critical judgements that the Directors have made in the process of
applying the Group's accounting policies and that have the most significant
effect on the amounts recognised in these consolidated interim financial
statements are set out below.
Treatment of revenue arising from test sales reimbursed by US insurance payors
The Group recognises revenue when or as the relevant performance obligations
in its contracts with customers are completed. Sales of the Group's
proprietary tests can be paid for by patients, payors with whom the Group has
direct agreements in place, or by US insurers through the reimbursement
process. In this final case, the Group may obtain an acknowledgement of
financial responsibility from a patient before processing a test.
EpiSwitch® CiRT and PSE tests were regularly reimbursed by several US
insurers throughout the period, for a range of amounts. The amount received is
influenced by several factors, including the terms of individual patients'
policies such as requirements for co-payment, the price listed for the test,
if any, in the Centers for Medicare and Medicaid Services (CMS) Clinical
Laboratory Fee Schedule (CLFS), insurers' own coverage policies in respect of
the tests, and claim denials. Where reimbursement for a test is initially
denied, or reimbursed at a lower-than-expected amount, the Group avails itself
of the appeals process that exists in the reimbursement system. At the period
end, a number of appeals were in process but not yet complete.
The above factors are relevant to Management's decision on whether a contract
with a customer exists and therefore whether the five-step process of revenue
recognition included in IFRS 15 Revenue from Contracts with Customers should
be followed or whether instead revenue should be recognised on final receipt
of funds from a payor.
Management exercised judgement in determining that for the Group's test orders
in the period, the patient should be considered the customer, even if there is
no explicit reimbursement agreement in place between the Group and the
patient, the contract with the patient being judged to be established in
accordance with customary business practices.
IFRS 15 "Revenue from Contracts with Customers" sets out a five-step model for
revenue recognition. For the Group's clinical tests, since reimbursement
ultimately received from insurers is variable, Management must exercise
judgement in determining the amount and timing of revenue to be recognised.
Following the guidance in IFRS 15, Management exercised judgement to limit the
amount of variable consideration recognised to the "unconstrained" portion of
such consideration. This means that the Group recognises revenue up to the
amount of variable consideration that is not subject to a potential
significant reversal until additional information is obtained or the
uncertainty associated with additional payments or refunds is subsequently
resolved.
Since 30 September 2024, the quantity and stability of historical
reimbursement data available to the Group, which it uses to predict receipts
from insurers and therefore the amount of variable consideration to recognise
on delivery of a test report to a patient's doctor, have both increased. For
the six-month period ended 31 March 2025, variable consideration arising from
US insurance-reimbursed clinical tests has been recognised, subject to a
constraint. In previous periods, variable consideration was judged to be
constrained to zero.
To the extent that this estimate were to be inappropriate, the Group's revenue
for the period would be increased or decreased, but Management do not expect
that this would result in any material change to the amounts recognised in
these financial statements.
Management anticipate that in future periods, as the Group continues to record
more information relating to historical collections experience, it is likely
that judgement will continue to be required in determining the extent to which
variable consideration relating to these tests is unconstrained and should
therefore be recognised.
There have been no significant changes to critical accounting judgements or
accounting estimates of amounts reported in prior financial periods.
3. Revenue
All revenue is derived from the Group's principal activities, namely sales of
proprietary products and biomarker research and development. Analysis of the
Group's revenue by principal activities, geography and pattern of revenue
recognition is as follows:
Six-month period Year ended 30 September
ended 31 March
2025 2024 2024
£000 £000 £000
Continuing operations:
Sales of proprietary products
USA 500 121 345
Rest of World 87 20 63
587 141 408
Biomarker research and development
USA - 103 114
Rest of World - 83 114
- 186 228
Consolidated revenue 587 327 636
Six-month period Year ended 30 September
ended 31 March
2025 2024 2024
£000 £000 £000
Continuing operations
Revenue recognised at a point in time 587 141 408
Revenue recognised over time - 186 228
587 327 636
Information about major customers
The Group's revenues for the periods covered by this report are derived from a
large and growing number of customers. Revenue from individual customers
representing a significant proportion of the total is generally either from
projects for pharma and other customers or, for sales of clinical tests, sales
to distributors who are classed as single customers. Customers representing
more than 10% of the revenue for the period are summarised below:
Six-month period Year ended 30 September
ended 31 March
2025 2024 2024
£000 £000 £000
Revenue from individual customers each representing more than 10% of revenue
for the period:
66 155 170
Number Number Number
Number of individual customers each representing more than 10% of revenue for
the period
1 2 2
4. Business segments
Products and services from which reportable segments derive their revenues
Information reported to the Group's Executive Chairman (who has been
determined to be the Group's Chief Operating Decision Maker) for the purposes
of resource allocation and assessment of segment performance is focused on
costs incurred to support the Group's main activities. The Group is currently
determined to have one reportable segment under IFRS 8, that of sales and
proprietary products and biomarker research and development. This assessment
will be kept under review as the Group's activity expands.
The Group's operating expenses and non-current assets, analysed by
geographical location were as follows:
Six-month period Year ended
ended 31 March 30 September
2025 2024 2024
£000 £000 £000
Staff costs
UK 1,158 1,385 2,531
USA 1,383 1,551 2,869
Rest of World 50 42 95
Total staff costs 2,591 2,978 5,495
Research & development costs
UK 214 239 540
USA 176 86 269
Rest of World 20 - -
Total research & development costs 410 325 809
General & other admin costs
UK 1, 913 1,353 2,598
USA 486 840 1,837
Rest of World 19 7 44
Total general & other admin costs 2, 418 2,200 4,479
31 March 2025 31 March 2025 30 September 2025
Non-current assets £000 £000 £000
UK 5,744 7,162 6,025
USA 889 1,298 1,015
Malaysia 15 34 22
Total non-current assets 6,648 8,494 7,062
5. Staff costs
Six-month period Year ended
ended 31 March 30 September
2025 2024 2024
£000 £000 £000
Wages and salaries 2,267 2,648 4,767
Social security costs 184 193 443
Other pension costs 140 137 285
Share based payments 161 300 514
2,752 3,278 6,009
The average number of persons, including executive directors, employed by the
Group during the period was as follows:
Six-month period Year ended
ended 31 March 30 September
2025 2024 2024
Number Number Number
Management and administration 8 15 12
Clinical operations and customer support 12 11 13
Laboratory-based 24 27 26
44 53 51
6. Earnings per share
From continuing operations
The calculation of the basic and diluted earnings per share is based on the
following data:
Six-month period Year ended
ended 31 March 30 September
2025 2024 2024
£000 £000 £000
Earnings for the purposes of basic earnings per share being net loss (5,751) (4,725) (11,567)
attributable to owners of the Company
Earnings for the purposes of diluted earnings per share (5,751) (4,725) (11,567)
No. No. No.
Number of shares
Weighted average number of ordinary shares for the purposes of basic and 850,772,164 202,303,415 255,728,889
diluted earnings per share*
Pence Pence Pence
Loss per share
Basic and diluted loss per share (0.7) (2.3) (4.5)
* Ordinary shares that may be issued on the exercise of options or warrants
are not treated as dilutive as the Group is loss-making and the potential
ordinary shares do not increase the loss per share from continuing operations.
7. Intangible fixed assets
Group Website development costs Software development costs Patents Total
£000 £000 £000 £000
Cost
At 1 October 2024 62 246 1,529 1,837
Additions - 10 167 177
Exchange differences - 7 - 7
At 31 March 2025 62 263 1,696 2,021
Amortisation
At 1 October 2024 62 145 279 486
Charge for the period - 29 62 91
Exchange differences - 4 - 4
At 31 March 2025 62 178 341 581
Carrying amount
At 31 March 2025 - 85 1,355 1,440
At 31 March 2024 - 76 1,984 2,060
At 30 September 2024 - 101 1,250 1,351
8. Property, plant and equipment
Group Leasehold improvements Office equipment Fixtures & fittings Laboratory equipment Total
£000 £000 £000 £000 £000
Cost
At 1 October 2024 2,099 199 186 2,000 4,484
Additions - - - - -
Disposals - (5) - (1) (6)
Exchange differences - 3 - 11 14
At 31 March 2025 2,099 197 186 2,010 4,492
Accumulated depreciation
At 1 October 2024 648 158 112 1,804 2,722
Charge for the period 105 14 18 60 197
Eliminated on disposals - (5) - (1) (6)
Exchange differences - - - 5 5
At 31 March 2025 753 167 130 1,868 2,918
Carrying amount
At 31 March 2025 1,346 30 56 142 1,574
At 31 March 2024 1,554 51 90 327 2,022
At 30 September 2024 1,451 41 74 196 1,762
9. Right-of-Use Assets
Group Buildings Other Total
£000 £000 £000
Cost
At 1 October 2024 6,135 18 6,153
Additions - - -
Derecognition (220) - (220)
Exchange differences 37 - 37
At 31 March 2025 5,952 18 5,970
Accumulated depreciation
At 1 October 2024 2,186 18 2,204
Charge for the period 342 - 342
Derecognition (220) - (220)
Exchange differences 10 - 10
At 31 March 2025 2,318 18 2,336
Carrying amount
At 31 March 2025 3,634 - 3,634
At 31 March 2024 4,362 1 4,363
At 30 September 2024 3,949 - 3,949
10. Leasing
Group 31 March 31 March 30 September
2025 2024 2024
Maturity analysis: £000 £000 £000
Year 1 1,035 1,049 1,236
Year 2 1,041 1,040 1,030
Year 3 1,047 1,046 1,036
Year 4 1,054 1,053 1,042
Year 5+ 1,500 2,560 2,020
5,677 6,748 6,364
Less: future interest charges (537) (743) (624)
5,140 6,005 5,740
Analysed as:
Lease liabilities (current) 852 840 1,046
Lease liabilities (non-current) 4,288 5,165 4,694
5,140 6,005 5,740
The group has elected not to recognise a lease liability for short term leases
(leases with an expected term of 12 months or less) or for leases of low value
assets. Payments made under such leases are expensed on a straight-line basis.
11. Share capital of the Company
31 March 2025 31 March 2024 30 September 2024
Number £ Number £ Number £
Authorised shares
Ordinary shares of £0.01 each - - 202,303,415 2,023,034 311,855,650 3,118,557
Ordinary shares of £0.001 each 1,957,577,641 1,957,578 - - - -
Deferred shares of £0.009 each 319,319,226 2,873,873 - - - -
4,831,451 2,023,034 3,118,557
At 31 March 2024 and 30 September 2024, the Company had one class of ordinary
shares which carry no right to fixed income.
On 5 April 2024 and 8 April 2024, the Company issued a total of 109,552,235
new ordinary shares at an issue price of £0.09 per share raising gross
proceeds of £9.9m with issuance costs of £0.8m.
In October, November and December 2024, the Company issued shares to certain
directors PDMRs and senior staff in lieu of part of their salaries and fees:
on 28 October 2024, the Company issued 2,285,741 new ordinary shares at an
issue price of £0.011 per share; on 29 November 2024, the Company issued
2,435,178 new ordinary shares at an issue price of £0.0125 per share; and on
24 December 2024, the Company issued 2,742,657 new ordinary shares at an issue
price of £0.013 per share.
On 31 January 2025, the shareholders of the Company approved a share capital
reorganisation, whereby each of the 319,319,226 ordinary shares of £0.01 each
in the capital of the Company then in issue was sub-divided and re-designated
as one new ordinary share of £0.001 each in the capital of the Company and
one deferred share of £0.009 each in the capital of the Company.
Following the share capital reorganisation, there were 319,319,226 ordinary
shares of £0.001 each and 319,319,226 deferred shares of £0.009 each. As all
of the existing ordinary shares were sub-divided and re-designated, the
proportion of the issued share capital of the Company held by each shareholder
immediately following the share capital reorganisation remained unchanged. In
addition, apart from having a different nominal value, each ordinary share
with a nominal value of £0.001 carries the same rights and represents the
same proportionate interest in the Company as an original ordinary share with
a nominal value of £0.01.
The deferred shares created do not carry any rights to vote or dividend
rights. In addition, holders of deferred shares will only be entitled to a
payment on a return of capital or on a winding up of the Company after each of
the holders of ordinary shares have received a payment of £1,000,000 on each
such share. The deferred shares are not listed on AIM and are not transferable
without the prior written consent of the Board. No share certificates have
been issued in respect of the deferred shares, nor are CREST accounts of
shareholders credited in respect of any entitlement to deferred shares. The
Board's intention is that deferred shares will be bought back and cancelled in
due course.
On 3 February 2025 and 4 February 2025, the Company issued a total of
1,638,258,415 new ordinary shares of £0.001 each at an issue price of £0.005
per share.
The Company has a number of shares reserved for issue pursuant to warrants and
under an equity-settled share option scheme; further details are disclosed in
Notes 12 and 13. No shares were issued on the exercise of share options or
warrants during any of the periods covered by these accounts.
12. Share-based payments
Equity-settled share option scheme
In November 2016, the Company established an Enterprise Management Incentive
("EMI") share option scheme, under which options have been granted to certain
employees, and a non-employee option scheme with similar terms, except that
options granted under it may not have EMI status. EMI and non-EMI share
options were also previously granted under a share option scheme established
in October 2008 ("the 2008 Scheme"). The Company does not intend to grant any
further options under the 2008 Scheme. All of the schemes are equity-settled
share-based payment arrangements, whereby the individuals are granted share
options of the Company's equity instruments, namely ordinary shares of 0.1
pence each.
The schemes include non-market-based vesting conditions only, whereby the
share options may be exercised from the date of vesting until the 10(th)
anniversary of the grant date. In most cases options vest under the following
pattern: one-third of options granted vest on the first anniversary of the
grant date; one-third on the second anniversary and one-third on the third
anniversary. The only exceptions to this pattern is 84,000 options which were
granted in the year ended 30 September 2016 which vested immediately upon
grant and 96,000,000 options issued to Executive Chairman Iain Ross during the
period, which vest in equal tranches on a monthly basis over the period to 31
January 2027.
The options outstanding as at 31 March 2025 had exercise prices in the range
of £0.0055 to £2.10.
Options outstanding Six-month period Year ended 30 September
ended 31 March
2025 2024 2024
Unaudited Unaudited Audited
Number Number Number
Outstanding at start of period 23,004,495 9,983,143 9,983,143
Granted during the period 218,000,000 3,383,000 14,048,020
Forfeited during the period (13,841,733) (238,333) (1,026,668)
Exercised during the period - - -
Outstanding at end of period 227,162,762 13,127,810 23,004,495
Weighted average remaining contractual life (in years) of options outstanding 9.76 6.51 7.94
at the period end
Options exercisable Number of Options Weighted average exercise price Latest exercise price
£
£
At 31 March 2025 14,744,902 0.26 0.0055
At 31 March 2024 5,879,409 0.75 0.1600
At 30 September 2024 7,506,823 0.67 0.0900
Share option expense Six-month period Year ended 30 September
ended 31 March
2025 2024 2024
£000 £000 £000
Expense arising from share-based payment transactions 161 300 514
13. Warrants
As at 31 March 2025 there were 95,991,969 shares reserved for issue under
warrants (30 September 2024 and 31 March 2024: 7,791,803).
88,200,166 warrants granted during the period (the "2025 Warrants") have an
exercise price of 0.5p and may be exercised up to 4 February 2030. The 2025
Warrants are exercisable on payment of the exercise price in cash and are
classified as equity instruments (entitling the holders of the warrants to a
fixed number of shares in exchange for a fixed cash amount). The fair value on
issue of the 2025 Warrants was estimated using the Black-Scholes option
pricing model using the assumptions set out below. The fair value on issue was
charged to the share premium reserve with a corresponding credit to the
warrant reserve, as shown in the statement of changes in equity.
4 February 2025
Share price at value date (p) 0.5
Exercise price (p) 0.5
Expected volatility 103%
Dividend yield 0%
Expected life of 2025 Warrants 5 years
Risk free interest rate 4.5%
Fair value per 2025 Warrant (p) 0.39
7,791,803 warrants issued in 2021 (the "2021 Warrants") have an exercise price
of 58.125p and may be exercised for a period beginning one year and ending
five years following the date of issuance. In certain circumstances, the 2021
Warrants may be exercised by way of a 'cashless exercise' and on completion of
certain "Fundamental Transactions", the holder of the 2021 Warrants may be
entitled to "Alternative Consideration" other than shares, such as cash or
property. Accordingly, the Directors concluded on their issue that the 2021
Warrants should be classified within liabilities in the Company's financial
statements.
On issue and at each subsequent reporting date, the fair value of the 2021
Warrants has been estimated using the Black-Scholes option pricing model, with
movements in the fair value charged or credited to the income statement.
Volatility has been estimated by reference to historical share price data over
a period commensurate with the expected term of the options awarded. The
assumptions used in arriving at the fair value for the 2021 Warrants at each
reporting date were as follows:
31 March 31 March 30 September 2024
2025 2024
Share price at value date (p) 0.475 9.4 3.2
Exercise price (p) 58.125 58.125 58.125
Expected volatility 142.79% 98.06% 98.85%
Dividend yield 0% 0% 0%
Expected life of 2021 Warrants 1.61 years 2.61 years 2.11years
Risk free interest rate 4.28% 3.87% 3.82%
Fair value per 2021 Warrant (p) 0.01 2.0 0.2
31 March 31 March 30 September
2025 2024 2024
£000 £000 £000
Warrant liability 1 158 11
14. Financial instruments
Financial risk management objectives and policies
The Group is exposed to various risks in relation to financial instruments,
the main types of risk being market risk, credit risk and liquidity risk,
which are described in more detail below.
The Group's financial assets and liabilities are summarised by category in the
table below.
The Group's financial risk management is co-ordinated at its head office by
its finance function, in close co-operation with the Board. It co-ordinates
access to financial markets, monitors and manages the financial risks relating
to the operations of the Group through internal reports which analyse
exposures.
The Group does not trade in financial assets for speculative purposes, nor has
it entered into derivatives.
Categories of financial instruments
The carrying amounts of financial assets and financial liabilities in each
category are as follows:
Group 31 March 31 March 30 September
2025 2024 2024
Note £000 £000 £000
Financial assets
Amortised cost
Cash and cash equivalents 4,261 1,187 1,827
Term deposits - - 1,000
Trade and other receivables 182 469 607
Total financial assets 4,443 1,656 3,434
Financial liabilities
Amortised cost
Trade and other payables 1,603 2,690 1,400
Lease liabilities 10 5,140 6,005 5,740
6,743 8,695 7,140
FVTPL
Warrant liability 13 1 158 11
Total financial liabilities 6,744 8,853 7,151
Fair value measurement of financial instruments
Financial assets and financial liabilities measured at fair value in the
consolidated statement of financial position are grouped into three levels of
a fair value hierarchy. The three levels are defined based on the
observability of significant inputs to the measurement, as follows:
· Level 1: quoted prices (unadjusted) in active markets for
identical assets or liabilities
· Level 2: inputs other than quoted prices included within Level 1
that are observable for the asset or liability, either directly or indirectly
· Level 3: unobservable inputs for the asset or liability.
The following table shows the levels within the hierarchy of financial
liabilities measured at fair value on a recurring basis (there were no
financial assets measured at fair value on a recurring basis in any of the
periods):
Group
Level 1 Level 2 Level 3 Total
At 31 March 2025 Note £000 £000 £000 £000
Financial liabilities
Warrant liability 13 - 1 - 1
- 1 - 1
At 31 March 2024
Financial liabilities
Warrant liability - 158 - 158
- 158 - 158
At 30 September 2024
Financial liabilities
Warrant liability - 11 - 11
- 11 - 11
Management has assessed that the fair values of cash and term deposits, trade
receivables, trade payables and other current liabilities approximate their
carrying amounts largely due to the short-term maturities of these
instruments. Further, the Directors consider that the carrying amounts of
other financial assets and financial liabilities recorded at amortised cost in
the financial statements approximate to their fair values. Accordingly, none
of the bases for valuation under the fair value hierarchy set out in IFRS 13
'Fair Value Measurement' have been deployed in arriving at the values for
these items.
Market risk
The Group's activities expose it primarily to the financial risks of changes
in foreign currency exchange rates (see below). To mitigate its exposure to
foreign currency risk, the Group monitors amounts to be paid and received in
specific currencies, and where these are expected largely to offset one
another, no further currency hedging activity or forward exchange contracts
are entered into.
Foreign currency sensitivity
The Group undertakes transactions denominated in foreign currencies, therefore
exposures to exchange rate fluctuations arise. Exchange rate exposures are
managed within approved policy parameters, utilising natural hedging as
outlined above where possible. The carrying amounts of the Group's and
Company's foreign currency-denominated monetary assets and liabilities at the
relevant period end dates are as follows:
Assets
Group 31 March 2025 31 March 2024 30 September 2024
£000 £000 £000
US dollar 433 538 390
Singapore dollar 19 23 18
Malaysian ringgit 8 14 11
Outstanding at end of period 460 575 419
Liabilities
31 March 2025 31 March 2024 30 September 2024
£000 £000 £000
US dollar (181) (1,155) (214)
Singapore dollar (4) (6) (4)
Euro (22) (13) (10)
Malaysian ringgit - - -
Outstanding at end of period (207) (1,174) (228)
The Group is mainly exposed to variations in the exchange rate between
sterling and the US dollar and, to a lesser extent, the Singapore dollar.
The following table details the Group's sensitivity to a 10% weakening in the
pound sterling against the relevant foreign currencies. 10% is the sensitivity
rate used when reporting foreign currency risk internally to key management
personnel and represents management's assessment of a reasonably possible
movement in foreign exchange rates over the medium term (3-12 months). The
sensitivity analysis includes only outstanding foreign currency denominated
monetary items and adjusts their translation at the period end for a 10%
change in foreign currency rates. For a 10% strengthening of the pound
sterling against the relevant currency, there would be a comparable impact on
the profit and other equity, and the balances below would be negative.
US dollar impact Singapore dollar impact
Six-month period ended Year ended Six-month period ended Year ended
31 March 2025 31 March 2024 30 September 2024 31 March 2025 31 March 2024 30 September 2024
£000 £000 £000 £000 £000 £000
Profit 25 62 18 2 2 2
In Management's opinion, the sensitivity analysis is representative of the
inherent foreign exchange risk through the year.
Interest rate sensitivity
The Group is not significantly exposed to interest rate risk because it does
not have any external borrowings. It does hold funds on deposit in accounts
paying variable interest rates. The Group's finance income is therefore
affected by variations in deposit interest rates.
Credit risk
Credit risk is the risk that a counterparty fails to discharge its contractual
obligations, resulting in financial loss to the Group. The Group is primarily
exposed to credit risk in respect of its cash, cash equivalents and term
deposits and trade and other receivables.
Credit risk management
The Group has adopted a policy of only dealing with creditworthy
counterparties and obtaining sufficient collateral where appropriate, as a
means of mitigating the risk of financial loss from defaults. The Group makes
appropriate enquiries of the counter party and independent third parties to
determine credit worthiness. Use of other publicly available financial
information and the Group's own trading records is made to rate its banking
counterparties and major customers. The Group's exposure and the credit
worthiness of its counterparties are continuously monitored and the aggregate
value of transactions is spread amongst approved counterparties. Credit
exposure is also controlled by counterparty limits that are reviewed and
approved by Group management continuously.
The vast majority of the Group's cash and cash equivalents are invested either
with systemic UK and global banks or UK banks with a Tier 1 capital ratio
significantly in excess of the current regulatory recommendation. Cash in
excess of the Group's immediate requirements is predominantly invested in
short-term deposits, breakable term deposits or notice accounts which allow
for instant access to funds if necessary. The Group holds some deposits in
accounts requiring notice of 95 days to access funds.
Trade receivables consist of a small number of customers, spread across
various geographical areas. Ongoing credit evaluation is performed on the
financial condition of accounts receivable. Expected credit loss rates are
based on the Group's historical credit losses during the 48 months prior to 1
April 2025. There were no credit losses during that period, but where
appropriate, the historical rates are adjusted to reflect specific current and
forward-looking factors that may affect a customer's ability to settle the
amount outstanding.
Trade receivables are written off when there is no reasonable expectation of
recovery. Failure to make payments within 180 days of an invoice's due date
and failure to engage with the Group on alternative payment arrangements would
be considered indicative of no reasonable expectation of recovery.
Because the commercial research and grant-funded contracts in which the Group
is involved tend to be invoiced by means of milestone payments covering a
substantial portion of each project, this may distort the credit exposure
profile at certain points during a given financial period. For the six-month
period ended 31 March 2025 the proportion of revenue attributable to one
customer was 11% (year ended 30 September 2024: 16%), but the Directors are of
the view that this does not signify that there is more than a low to moderate
risk in this respect, and this is borne out by the Group's history of having
incurred no credit losses throughout the period covered by this report.
The carrying amount recorded for financial assets in the consolidated
financial statements is stated net of any impairment losses and represents the
Group's maximum exposure to credit risk. No guarantees have been given in
respect of third parties.
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting
the obligations associated with its financial liabilities. To counter this
risk, the Group seeks to operate from cash reserves and with no bank debt. The
Group monitors forecast cash inflows and outflows and adjusts its term
deposits accordingly to ensure that sufficient funds are available to meet
cash requirements. For its contracts with pharma and biotech customers, the
Group benefits from a substantial proportion of revenue being paid in advance.
The following table details the Group's expected maturity for its
non-derivative financial assets. It has been drawn up based on the
undiscounted contractual maturities of the financial assets including interest
that will be earned on those assets. The inclusion of information on
non-derivative financial assets is necessary to understand the Group's
liquidity risk management as the liquidity is managed on a net asset and
liability basis.
Group Weighted average effective interest rate Less 1-3 months 3 months to 1 year 1-5 years 5+ years Total
than 1 month
% £000 £000 £000 £000 £000 £000
31 March 2025
Non-interest bearing 4,438 - - - - 4,438
Variable interest rate instruments 4.3% 5 - - - - 5
4,443 - - - - 4,443
31 March 2024
Non-interest bearing 1,646 - - - - 1,646
Variable interest rate instruments 5.2% 10 - - - - 10
1,656 - - - - 1,656
30 September 2024
Non-interest bearing 2,426 - - - - 2,426
Variable interest rate instruments 4.8% 8 1,000 - - - 1,008
2,434 1,000 - - - 3,434
Variable rate instruments above are balances on interest-bearing notice
accounts. The amounts included above for variable interest rate instruments
for both non-derivative financial assets and liabilities are subject to change
if variable interest rates differ to those estimates of interest rates
determined at the relevant year-ends presented above.
The following table details the expected maturity of the Group's
non-derivative financial liabilities. Figures disclosed in the table are
contractual undiscounted cashflows including, for lease liabilities, future
interest charges.
Group Weighted average effective interest rate Less 1-3 months 3 months to 1 year 1-5 years 5+ years Total
than 1 month
% £000 £000 £000 £000 £000 £000
31 March 2024
Non-interest bearing 1,603 - - - - 1,603
Fixed interest rate instruments 8.4% 19 240 776 4,017 626 5,678
1,622 240 776 4,017 626 7,281
31 March 2024
Non-interest bearing 2,690 - - - - 2,690
Fixed interest rate instruments 8.8% 21 242 786 4,199 1,501 6,749
2,711 242 786 4,199 1,501 9,439
30 September 2024
Non-interest bearing 1,400 - - - - 1,400
Fixed interest rate instruments 8.7% 227 239 770 4,097 1,032 6,365
1,627 239 770 4,097 1,032 7,765
15. Related party transactions
During the period, the Group had transactions with related parties as shown in
the table below.
Net amount paid / (received)
Six-month period ended Year ended
Related party Nature of relationship Reason for transactions 31 March 2025 31 March 2024 30 September 2024
£000 £000 £000
Baden Hill LLP Matthew Wakefield (who was a Non-Executive Director until 17 March 2025) is a Baden Hill acted as subagent to the lead broker and was paid commission in the 63 - 168
partner and shareholder in Baden Hill form of 12,580,000 newly issued shares in connection with the fundraising in
February 2025.
Baden Hill acted as joint broker and was paid commission in connection with
the Placing through which the Company raised equity funds in April 2024.
Ms S Erdyneeva Daughter of Jon Burrows (who was a Director and Chief Executive Officer until Employment as Social Media Specialist in OBD Inc. 13* 27 59
16 December 2024)
Vulpes Investment Management through Vulpes Testudo Fund Vulpes Investment Management is controlled by Non-Executive Director Stephen Vulpes Investment Management acquired new ordinary shares through the equity (1,000) - (200)
Diggle fundraises in April 2024 and February 2025.
Vulpes Testudo Fund provided an interest-free, unsecured, subordinated loan 111 - -
facility of up to £1m to the Company during the period for which it received
an arrangement and termination fee, paid in newly-issued ordinary shares.
During the period 25,755,402 new ordinary shares were issued to six Directors
(in addition to amounts in respect of Stephen Diggle shown in the table above)
for a total of £152,000 (in lieu of salary and as part of the fundraising in
February 2025). No Directors subscribed for shares in the six months ended 31
March 2024. In the year ended 30 September 2024, 1,166,664 new ordinary shares
were issued to four Directors for a total of £105,000 as part of the
fundraising in April 2024.
* costs stated relate to the period 1 October 2024 to 16 December 2024.
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